Cryptocurrency and crypto trading came into existence with the advent of Bitcoin in 2009. It is a digital form of currency, and you can use it to purchase goods and services from major corporations like Microsoft or PayPal, along with investments and trading. However, Bitcoin is not the only cryptocurrency and there are several other players in the market now.
Cryptocurrencies are a form of ‘decentralized finance’, meaning there is no need for a physical bank for centralized operations. The currency is completely digital and can be used for the exchange of goods or services digitally. Crypto trading is also done digitally, similar to the trading of other commodities.
Difference between Bitcoin, Altcoin, and Stablecoin
All forms of cryptocurrencies are based on blockchain technology and allow for transactions around the world without any intervention from central banks. Bitcoin is the first name that comes to mind when you think of cryptocurrencies, as it was the first one to be invented. It is also the highest valued cryptocurrency, but it’s not the only player in the market. Several other interesting crypto projects are based on the same blockchain technology, and many more are coming up.
Bitcoins are extremely time-consuming and strenuous to mine, and as a result of exceeding demand and short supply, Altcoins came into being. They are an alternative cryptocurrency to Bitcoin, hence the name. In this scenario, the mining power of an investor is directly proportional to the number of coins they have. The process of mining these blocks is much shorter and faster. For example, if Bitcoin takes 10 minutes to mine one block, a dogecoin will take only about one minute. Some Altcoins, such as Ethereum and Ripple, are also pre-mined.
Stablecoins are based on the same blockchain technology as Bitcoins and Altcoins, but their prices are much more stable in the market as opposed to the volatility of other cryptocurrencies. Stablecoins are used as a means to invest regular currency in the form of external assets like legal tenders, which can be later converted to other cryptocurrencies. Since volatility is what allows investors to spot crypto trading opportunities, Stablecoins tend to be less popular than Bitcoin. Examples of Stablecoins are Tether and MakerDAO.
Major Altcoins in 2021
Along with Bitcoin, there are nearly 9,000 other cryptocurrencies in the market. Any cryptocurrency which is not Bitcoin is called an Altcoin, and they make up for almost 40% of the entire cryptocurrency market. The types of Altcoins include Stablecoins, Security Tokens, Mining-based coins, and Utility Tokens. The most popular Altcoins are mining-based coins. You can learn more about Altcoins here.
As of March 2021, these were the top ten Altcoins to watch for in the market:
- Binance Coin
Litecoin is based on the same technology as Bitcoin but has a four-times higher limit of 84 million coins compared to the 21 million limit of Bitcoin. Litecoin is also an interesting option since its mining is approved more frequently, and it’s also much less expensive than Bitcoin. Overall, Altcoins are growing in popularity as an alternative to Bitcoin if you wish to get involved in the CFD crypto trading scene or diversify your investments.
Growth of the major Altcoins in Q2
The combined value of all cryptocurrencies reached a whopping $2 trillion in August for the first time in three months. The overall crypto trading market had taken a hit after a $1 trillion crash in May and had not seen an upsurge for the remaining months of the quarter. However, investors are optimistic again now that it has hit a $2 trillion high. Let’s look at the astonishing growth of the top 5 cryptocurrencies of 2021:
- Bitcoin: it surged a massive 19% and has now crossed the $46,500 price. Considering that you could have purchased one Bitcoin for about $500 five years ago, the currency has a growth rate of nearly 8,900%. Bitcoin’s total market cap as of August 2021 is $856 billion.
- Ethereum: it’s the second-largest cryptocurrency in the market and has recently seen a surge of more than 20% and is now at $3,219.91. Five years ago, it cost only $11, which means Ethereum has seen a growth of about 27,000% in just five years. Its total market cap is over $357 billion.
- Binance Coin: it’s one of the newer entrants in the market but is already the third-largest cryptocurrency with a total market cap of over $70 billion. Since its inception in 2017, it has gone from $0.10 per coin up to $419 in August 2021, a massive 419,000% growth rate.
- Cardano: Cardano’s ADA is also a newcomer in the market that came into existence in 2017. Its price was only $0.02 when it started, and in August 2021, the price has gone up to $2.11, a growth of about 10,000%. Cardano’s total market cap is over $69 billion as of August 2021.
- Tether: With a market cap of over $64 billion, Tether is a USD and Euro-backed Stablecoin, which means its value is equivalent to regular currency. Stablecoin is not prone to volatility, making it a good crypto alternative for risk-averse investors.
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